Each year, we celebrate 5^th September as Teachers’ Day, in honor of former President of India, Dr. Sarvepalli Radhakrishnan. It is said that a teacher can change lives by with the right mix of challenges and chalk. Well, if you ask me, we can apply the same principle to our own life, but replace the ‘chalk’ with ‘responsibility’.

We always try to remember the lessons learnt in the classroom. We still hold fond memories of our favorite teacher, an incident in class that changed your life, a teacher pardoning a mistake or a reprimand that never left your mind. Let’s look at some financial lessons that we can learn from credit. This will include lessons related to credit obligations, credit worthiness and plain old budgeting.

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Financial Lessons To Learn

Despite being a nation growing in economy and stability, approximately 75% of the population are still oblivious to basic financial concepts. Many are unfamiliar with the concept of personal Loan and interest rates, credit cards and credit card debt, paying EMI via NEFT/RTGS, concept of mobile wallets, rise of payments bank etc.

Financial literacy is yet to be prioritized in our country, but finance is actually quite a touchy topic to salaried millennials. This could be due to the mentality. Many of us believe that handling finances is something to be planned or thought off once we are on the other side of 50. Being aware and educated about finances, credit, investments and money is important.

Loan Singh’s finance blog is doing its best to come up with interesting and useful finance topics each day. Our sincere plea to all our blog readers is to follow us on social media to catch up on what we feature every day. Salaried millennials can’t get enough of upcoming gadgets, designer clothing and lifestyle choices. But, when it comes to getting a grip on expenses, budgeting, income, insurance, savings, emi, taxes, assets, liabilities and risk management, we prefer deferring it to a later time.

Exceeding the monthly budget

Crossing the monthly budget is a common occurrence among millennials, and should be avoided. If you consistently breach your monthly budget, then it’s time for you to re-plan and re-do your budget. Check what you are constantly over spending on. See if you are reviewing the expenses based on receipts and statements.

Unexpected expenses

You cannot predict when sudden expenses may come-up. Your laptop may breakdown and need repairs, the car might just stall one day needing engine work, a leakage in the ceiling just before rains, sudden hospitalization of loved ones, etc. are just some examples which can throw your savings out of the window. If you don’t plan a good budget, then these emergencies can prove costly.

Being lax about budgeting

There is a tendency among us to be lazy when it comes to keeping an eye on our budget. We take time to prepare a good budget and also have great money management ideas, but procrastinate over actually tracking and managing the budget. Or you may purchase 3-4 policies or make multiple fixed deposits hoping that it would be enough to manage our savings, and make little effort to review these investment instruments.

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Money Management Lessons

Starting with basic money management, the lessons to learn here are linked directly to expense, income, investments, personal loan and credit card statements. These lessons can be learned by getting a hands-on approach to your expenses.

A once in a while check of your expenses can give you an idea of where your expenses are going and what is the ratio of income to expense. The best is to identify ways to curb the excessive spending and utilize the extra funds to invest.

Managing your finances needs you have a good deal of self-discipline, but it is not an impossible task. We are focusing on managing your finances to handle your credit obligations better. Some pointers are mentioned below.

Set financial goals

Writing down your goals will help you prioritize your spending. Prepare short term (achievable under a year), medium term (between 1-5 years) and long term goals (five years plus) on cards or stickers and put them up around the house.

For short term goals, you can work towards all of them at once. Look at how much you need. For e.g. purchasing a new laptop within the next 6 months. Have you started saving for it yet? Where can you allocate funds for that? Can Loan Singh be a good option for this? Have you checked Loan Singh’s eligibility criteria to see if you fit for a loan?

For long term goals you will have to plan a bit harder because you will have many expenses along the next 5 years. Divide your spending plan into separate categories with necessities taking priority. Groceries, utilities, insurance payment, policy payment, personal loan EMIs and credit card bill payments should take precedence over other expenses.

Create a budget

A budget guides your spending decisions, so that you spend on things that are important. It sets margins on spending, and by staying within those limits you can stay on track. The most important rule of a good budget is that – “Your Expenses should never be more than your Income”.

Review earlier month expenses for inaccuracies or make corrections to the current month’s expenses. Use receipts, statements or bills to evaluate the accuracy on the expenses.

If your expenses cross your income, try and change your spending pattern to stay true to the goals you have set for yourself. Prepare a list before you go out shopping and buy only what’s on it. Avoid excessive use of credit cards, minimizing the chances of falling into credit card debt.

Track your spending

Track your expenses for a minimum of one month. The longer you track the better. Write down the purchases you have made in a notebook or an excel spreadsheet or use a smartphone app.

Use debit or credit cards for transactions, so you can maintain receipts which you can utilize when tallying expenses during the end of the month.

Keep all your financial information and budgetary paperwork in one place. This will save you time because when you do want to plan or assess your financial goals, you will find all the information easily.

Focus on savings and review

Savings provide you with a safety net during challenging times. You should save depending upon your financial goals. Start with around 10% of your income each month and then slowly increase it as the year progresses. Investment options such as mutual funds, recurring or fixed deposits are ways you can improve your savings in the long term.

When you receive a raise in salary, use this extra cash to increase the amount of savings you maintain. Every once in a week, take time to review your budget and savings. See if you are on track with your financial goals. Check if you need to shift some amount from savings to emergency funds. Fine tune the financial plan, if need be.

About Loan Singh

Loan Singh is a digital lending platform that prides in providing online personal loan or unsecured personal loan to salaried individuals. You can apply for quick funds as an easy emergency loan which is not a bank loan. We provide a loan with the best personal loan interest rates. The instant funds, or instant loans, are loans between Rs.50,000 and Rs.5,00,000 taken for purposes such as:

• Home improvement loan/Home renovation loan
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You can calculate your easy EMIs using our personal loan EMI calculator. We accept bank statement, PAN, and Aadhaar for quick loan approval. A bad credit score or credit report errors can lead to personal loan rejection. The ‘Loan Singh Finance Blog’ is one of the best finance blogs in India. Loan Singh is a product of Seynse Technologies Pvt Ltd and is a partner to the Airtel Online Store.

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